Correlation Between Berwyn Income and Washington Mutual
Can any of the company-specific risk be diversified away by investing in both Berwyn Income and Washington Mutual at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Berwyn Income and Washington Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berwyn Income Fund and Washington Mutual Investors, you can compare the effects of market volatilities on Berwyn Income and Washington Mutual and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Berwyn Income with a short position of Washington Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berwyn Income and Washington Mutual.
Diversification Opportunities for Berwyn Income and Washington Mutual
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Berwyn and Washington is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Berwyn Income Fund and Washington Mutual Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Washington Mutual and Berwyn Income is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Berwyn Income Fund are associated (or correlated) with Washington Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Washington Mutual has no effect on the direction of Berwyn Income i.e., Berwyn Income and Washington Mutual go up and down completely randomly.
Pair Corralation between Berwyn Income and Washington Mutual
Assuming the 90 days horizon Berwyn Income Fund is expected to generate 0.46 times more return on investment than Washington Mutual. However, Berwyn Income Fund is 2.17 times less risky than Washington Mutual. It trades about 0.25 of its potential returns per unit of risk. Washington Mutual Investors is currently generating about -0.05 per unit of risk. If you would invest 1,329 in Berwyn Income Fund on September 13, 2024 and sell it today you would earn a total of 15.00 from holding Berwyn Income Fund or generate 1.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berwyn Income Fund vs. Washington Mutual Investors
Performance |
| Timeline |
| Berwyn Income |
| Washington Mutual |
Berwyn Income and Washington Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berwyn Income and Washington Mutual
The main advantage of trading using opposite Berwyn Income and Washington Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berwyn Income position performs unexpectedly, Washington Mutual can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Washington Mutual will offset losses from the drop in Washington Mutual's long position.| Berwyn Income vs. Great West Goldman Sachs | Berwyn Income vs. Oppenheimer Gold Special | Berwyn Income vs. Europac Gold Fund | Berwyn Income vs. Sprott Gold Equity |
| Washington Mutual vs. Growth Fund Of | Washington Mutual vs. Europacific Growth Fund | Washington Mutual vs. Smallcap World Fund | Washington Mutual vs. Investment Of America |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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